Item 1.01 Entry into a Material Definitive Agreement.
On December 5, 2017, Adaptive Medias, Inc., a Nevada
Corporation (the “Company”) entered into a Settlement Agreement and Stipulation (the “Settlement Agreement”)
with Livingston Asset Management, LLC, a Florida limited liability company (“LAM”), pursuant to which the Company agreed
to issue common stock to LAM in exchange for the settlement of $696,606.85 (the “Settlement Amount”) of past-due obligations
and accounts payable of the Company. LAM purchased the obligations and accounts payable from certain vendors of the Company as
described below.
On December 19, 2017, the Circuit Court of Baltimore
County, Maryland (the “Court”), entered an order (the “LAM Order”) approving, among other things, the fairness
of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities
Act”), in accordance with a stipulation of settlement, pursuant to the Settlement Agreement between the Company and LAM,
in the matter entitled
Livingston Asset Management LLC v. Adaptive Medias, Inc
. (the “LAM Action”). LAM commenced
the LAM Action against the Company to recover an aggregate of $696,606.85 of past-due obligations and accounts payable of the Company
(the “LAM Claim”), which LAM had acquired from certain vendors of the Company pursuant to the terms of separate claims
and purchase agreements between LAM and the Company’s vendors (the “LAM Assigned Accounts”). The LAM Assigned
Accounts relate to certain contractual obligations provided to the Company. The LAM Order provides for the full and final settlement
of the LAM Claim and the LAM Action. The Settlement Agreement became effective and binding upon the Company and LAM upon execution
of the LAM Order by the Court on December 19, 2017.
Pursuant to the terms of the Settlement Agreement approved
by the LAM Order, on December 19, 2017, the Company agreed to issue LAM shares of the Company’s common stock (the “LAM
Settlement Shares”), $0.00001 par value (the “Common Stock”). The Settlement Agreement provides that the LAM
Settlement Shares will be issued in one or more tranches, as necessary, sufficient to satisfy the LAM Settlement Amount through
the issuance of freely trading securities issued pursuant to Section 3(a)(10) of the Securities Act. Pursuant to the Settlement
Agreement, LAM may deliver a request to the Company for shares of Common Stock to be issued to LAM (the “LAM Share Request”).
The parties reasonably estimate that the fair market
value of the LAM Settlement Shares to be received by LAM is equal to approximately $928,808.00. In connection with the Settlement
Agreement, on December 20, 2017, the Company issued 74,146,000 shares of the Company’s common stock to LAM. Additional tranche
requests shall be made as requested by LAM until the LAM Settlement Amount is paid in full.
The Settlement Agreement provides that in no event shall
the number of shares of Common Stock issued to LAM or its designee in connection with the Settlement Agreement, when aggregated
with all other shares of Common Stock then beneficially owned by LAM and its affiliates (as calculated pursuant to Section 13(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder),
result in the beneficial ownership by LAM and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and the
rules and regulations thereunder) at any time of more than 9.99% of the Common Stock.
The Company has reserved a sufficient number of its
Common Stock to provide for issuances upon full satisfaction of the Settlement Amount. To the extent such shares do not satisfy
the Settlement Amount, the Company anticipates taking the necessary steps to ensure it increases its authorized shares to meet
its obligations under the Settlement Agreement.
The description of the Settlement Agreement does not
purport to be complete and is qualified in its entirety by reference to the Settlement Agreement, which is filed as Exhibit 10.1
to this Current Report on Form 8-K and incorporated herein by reference.